SEC looking at Steve Jobs health disclosures
There has been much talk about Steve Jobs health and who said what, and when. That previously idle chatter has finally resulted in an SEC probe about who knew what, and when.
The matter of the health of Steve Jobs, and how announcements relating to it were handled, is said to be in the crosshairs of a Security and Exchange Commission probe. It is all well and good to debate the issue of personal privacy vs. investor need-to-know in the media. Trying to figure out the exact sequence of events, and how they might play out, has provided and almost unlimited amount of grist for the Apple rumor mill. Even debating whether or not Steve Jobs is a critical component at Apple is certainly fair game.
But, as this column has previously reported, there are legal matters involved in this issue, though they are not nearly as much fun as the speculation. It is a matter of SEC law (and simple ethics) that investors have a right to know what is going on so that they can make an informed decision about the purchase of securities. Bloomberg is reporting today that SEC investigators are finally taking a belated but serious interest in the matter.
The focus of their investigation is whether or not Apple knew that Jobs was going to take a six-month medical leave of absence when they announced that he had a “hormone imbalance” on Jan. 5, 2009. The leave was announced on January 14, just nine days later. If the board knew that the six-month leave was imminent at the time of the initial announcement, they had an obligation to report it and not doing so may be construed as misleading investors.
“The issue here is: Did Apple or Jobs make misleading disclosures, tested by what they knew at the time?” said Robert Hillman, a securities law professor at the University of California, Davis. “A disclosure could be misleading if it’s a partial truth.”
The probe certainly does not mean that any charges will be filed. But it does bring a dose of reality to the rumor mill. The obligations to truthfully report matters material to the health of a company, under law, carry more weight than the privacy issue or the issue of how important Jobs is to Apple.
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